Advanced Drainage Systems Inc (WMS)
Working capital turnover
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,904,240 | 2,874,470 | 3,071,120 | 2,769,320 | 1,982,780 |
| Total current assets | US$ in thousands | 1,324,780 | 1,299,970 | 1,017,490 | 871,898 | 742,978 |
| Total current liabilities | US$ in thousands | 398,396 | 439,622 | 378,802 | 391,241 | 318,270 |
| Working capital turnover | 3.14 | 3.34 | 4.81 | 5.76 | 4.67 |
March 31, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,904,240K ÷ ($1,324,780K – $398,396K)
= 3.14
Advanced Drainage Systems Inc's working capital turnover has shown a fluctuating trend over the past five years. The ratio increased from 4.67 in March 31, 2021, to 5.76 in March 31, 2022, indicating an improvement in the efficiency of utilizing its working capital to generate sales. However, in the subsequent years, the working capital turnover decreased to 4.81 in March 31, 2023, 3.34 in March 31, 2024, and further to 3.14 in March 31, 2025.
The declining trend in working capital turnover from 2022 to 2025 suggests that Advanced Drainage Systems Inc may be experiencing challenges in managing its working capital efficiently to support sales growth. A decreasing turnover ratio may indicate potential issues such as excess inventory levels, slow collections from customers, or inefficient payment of suppliers.
It is recommended that the company conducts a detailed analysis of its working capital components and implements strategies to optimize the management of its current assets and liabilities. Improving working capital efficiency can help enhance liquidity, profitability, and overall financial health of Advanced Drainage Systems Inc.